Update: So the “fix” was only temporary and the following day after installing the new update, the yellow flash returned. Thankfully I was due a call from the Apple Team yesterday as a “catch up” to see how things were going and explained the situation.
She reiterated that this issue is known and they are genuinely working on a solution. It’s not just affecting Series 9s but watches all across the board as far back as Series 5/6. As I am one of the first apparently to push this issue they are using my Watch device to gather as much data stamps to figure out what is causing the issue. Again, they seem to believe it’s relating to the sensors on the underneath. In terms of what to do with your watch if you’re having this problem, she advised to just keep hold of it until the Engineering/Development Team suggest otherwise. They are confident a future OS update will fix the problem.
I just thought I’d keep you all in the loop (as there isn’t much advice out there on this issue) and to kind of reassure you all that as it stands the watches you have aren’t “faulty” but are just experiencing a temporary “glitch” due to something hiding in the software.